Season for Thai

Bangalore recently saw an addition of the new standalone Mango Tree Bistro bar, the 41st franchised outlet (and first of its kind in India) belonging to the 20-year-old, Bangkok-based, Mango Tree Worldwide Group, a holding by COCA Holding International Co Ltd. Trevor Mackenzie, Managing Director, Exquisine System, a company that brings extensive International experiences and resources in restaurant franchise management, discusses the Indian market with Roshna Chandran

The format

Rustic brick walls enlivened with colourful graffiti, menus on the ceiling, alfresco dining, DJ nights, karaoke evenings, and live performances describe the casual dine Mango Tree Bistro in Bangalore’s Indranagar. It replicates the design and ambience of all Mango Tree restaurants located in London, Tokyo, Dubai and Hong Kong, as well as the Mango Tree Cafés (a smaller format located in malls). It’s a cool place to hang out for youngsters, where they can enjoy good Thai food along with a lot of salads, informs Mackenzie.

“People in Bangalore, especially the women, are very health conscious, and prefer a lot of salads in their meal,” he comments. The Thai food is tailored to suit the Indian palate (a meal starts at Rs 600), but without taking away the Thai element. “I take the ingredients and mix them with a Thai flavour so that it becomes recognisable, and also so that people understand and like that taste. In the past four years we have won the best vegetarian restaurant award. I think you are going to see a Thai revolution in India, the kind which is already happening in Dubai. Pretty soon, we will see a lot of competition too, which is good.”

The franchise model

Mango Tree outlets range between 500 to 1,000 sqft and are located only at class A areas. A franchise requires an investment of USD 300,000. All ingredients are imported from Bangkok, so investment in a monthly stock has to be maintained. Since Mango Tree Bistro is the first outlet to open in India, there is tremendous pressure in the kitchen to maintain food quality and consistency, which are behind the success of the brand worldwide.
Franchisees are trained for a month in Bangkok, followed by a second round of training at the Bistro bar for a month, and they are monitored every six weeks. Exquisine System also offers training modules for the employees on gaining hands-on experience. Mackenzie informs that most of their outlets take 20 to 32 months to recover their ROI.

Growth highs and lows

Growing at 31.8 percent year on year, Mango Tree expanded to 11 more outlets in the last two years. Such hasty expansion through franchisees led to a few fall-outs last year, forcing the company to slow down their expansion pace and focus on operations and in providing quality and consistency in their food offerings. Says Mackenzie, “Our franchisees have to work towards a certain target. At this time in India, we do not believe that the market is ready for a master franchise model.”

As regards Mango Tree Cafés located in in malls, he informs that these bring in a smaller number of cheques as people do not really spend time drinking and lounging in mall premises. “DJ, live bands and karaoke nights are still new concepts in shopping malls, which, in India, are very family oriented shopping or dining destinations. So we will change the Mango Tree Bistro format to that of a cafe if we open in a mall.”

Another major challenge is the ‘honeymoon’ theory, where a lot of restaurants do very well during the initial year or the during the first 6 months and then business begins to plummet, and by the end of two years, most restaurants begin to either shut down or relocate. “In markets like Japan, we have 22 outlets that we have sustained for over 12 years; in London there are 3; in Bangkok, 18; and in Jakarta we are opening our second. So you can see that we are positioned quite strongly as a brand.”

Mango Tree in Mumbai will be opening next, followed by three other cities. Since the brand is viewing India as a long-term market, they are ready to take 10 more years to position their brand. Plus, the company does not find the market very competitive, which they feel can easily accomodate more brands.
Mango Tree Worldwide has announced plan of opening 100 outlets by 2015, and is expecting its annual turnover to double to USD 100 million within the next two years. A Mango Tree outlet is set to open in Washington in September this year followed by key locations in China.